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NEW QUESTION: 1
ABC Corporation just paid a dividend of $1.25 per share. These dividends are expected to grow at
2 3% over the next three years and thereafter come in line with its long term normalized growth rate of 7%.
If investors currently require a 13% rate of return from this stock, what is the best estimate of ABC's current stock price?
A. $42.20
B. $33.20
C. $45.93
Answer: B
Explanation:
Step 1: Find the PV of D1, D2 and D3
PV of D1 = (1.25*1.23)/1.13 = 1.361; PV of D2 = (1.25*1.23*1.23)/1.132 = 1.481; PV of D3 =
(1.25*1.23*1.23*1.23)/1.133 = 1.612
Step 2: Find the PV of all dividends beyond year 3: P3 = D4/(k - q) = (1.25*1.23*1.23*1.23*1.07)/(0.13 -
0 .07) = 41.48. Therefore PV of P3 = 41.48/1.133 = 28.75
Step 3: Sum the PVs of all the components to equal the stock price: PABC = 1.361 + 1.481 + 1.612 +
28.75 = $33.20.
NEW QUESTION: 2
A. Option C
B. Option B
C. Option A
D. Option D
Answer: B
Explanation:
NEW QUESTION: 3
Which statement is true of the logging configuration on the Cisco ASA?
A. The contents of the internal buffer will be saved to flash memory before the buffer is overwritten.
B. System log messages with a severity level of six and lower will be logged to the internal buffer.
C. System log messages with a severity level of six and higher will be logged to the internal buffer.
D. The contents of the internal buffer will be saved to an FTP server before the buffer is overwritten.
Answer: C
Explanation:
Explanation
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